A revenue shortfall and current tax policy combined with public sentiment provide an adequate playing field for the proposed changes. The Iowa budget changes, which are included in recent state Senate bill are intended to fill a revenue gap for the current state fiscal year, which ends June 30, 2018. For Iowa, state general fund spending totaled about $7.2 billion but could have faced potential cuts to Educational services. According to recent reports, the state's economy is growing, but revenues have increased less than forecast, at least partly because of a slump in Iowa's farm sector.

A significant tax policy difference between Iowa credit unions and banks is that credit unions pay what’s called a moneys and credits tax on legal reserves and banks pay a franchise tax on net income. Under the new bill, both banks and credit unions would pay 2% on their first $7.5MM in income and 4% on anything above. 

We’ll see if politics or policy trumps in Iowa...